November 2010 - Susman
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Changes in health insurance

An interesting thing happened the other day. The Department of Health and Human Services (HHS) made an amendment to current grandfathering regulations. Previously, an employer group health plan could lose its grandfather status if the employer, among other actions, changed health insurers. Thanks to this recent amendment, employers have more flexibility to shop their coverage and change insurance insurers and not lose their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.

HHS was concerned that the original grandfathered language would yield the unintended consequence of forcing employers to offer the same level of benefits to all of their employees thus causing premiums to rise substantially. Ultimately, HHS realized that allowing employers some flexibility in this regard would help some Americans retain their current coverage and, perhaps, their jobs.

This is huge, but not because of what it does for employers or their employees. My guess is that the amendment will affect maybe 1% of consumers. What is significant, what we can’t lose sight of, is that this is clear evidence that HHS and the Administration are willing to listen to and act on employers’, consumers’, insurers’ and other stakeholders’ concerns and ideas on how to make healthcare reform more workable and successful for Americans.

The Patient Protection and Affordable Care Act (PPACA) consists of over 2,700 pages. When all is said and done, between additional legislation and lots of regulations, the bill page volume could easily grow to over 200,000 over the next 10 years. We have all known for some time that many of the details in this massive legislation would have to be filled in as time passes. Early indicators like the one above as well as regulations postponing the W-2 requirement for one year, giving carriers a little more flexibility on children-only policies and granting waivers to some employers enabling them to continue using mini-med plans should give us renewed hope that our healthcare system can be reformed in a positive way. The result of the November 2nd elections reinforce my belief in this regard.

I heard from one industry leader that PPACA is very likely to cause wild gyrations in the healthcare delivery system over the next decade. There are likely to be lots of “ups” and “downs” in our journey. For me, I choose to believe that these recent “ups” are positive signs that once we’ve reached our destination, we’ll discover that Americans are benefiting from a vastly improved system and that the agent remains at their side just as they have been so every step of the way.

Thanks for this article from our friends at Warner Pacific!